As Europe's largest economy and most populous nation, Germany remains a key member of the continent's economic, political, and defense organizations. European power struggles immersed Germany in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. With the advent of the Cold War, two German states were formed in 1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself in key Western economic and security organizations, the EC, which became the EU, and NATO, while the Communist GDR was on the front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War allowed for German unification in 1990. Since then, Germany has expended considerable funds to bring Eastern productivity and wages up to Western standards. In January 1999, Germany and 10 other EU countries introduced a common European exchange currency, the euro.

emissions from coal-burning utilities and industries contribute to air pollution; acid rain, resulting from sulfur dioxide emissions, is damaging forests; pollution in the Baltic Sea from raw sewage and industrial effluents from rivers in eastern Germany; hazardous waste disposal; government established a mechanism for ending the use of nuclear power over the next 15 years; government working to meet EU commitment to identify nature preservation areas in line with the EU's Flora, Fauna, and Habitat directive

conventional long form: Federal Republic of Germany
conventional short form: Germany
local long form: Bundesrepublik Deutschland
local short form: Deutschland
former: German Empire, German Republic, German Reich

18 January 1871 (German Empire unification); divided into four zones of occupation (UK, US, USSR, and later, France) in 1945 following World War II; Federal Republic of Germany (FRG or West Germany) proclaimed 23 May 1949 and included the former UK, US, and French zones; German Democratic Republic (GDR or East Germany) proclaimed 7 October 1949 and included the former USSR zone; unification of West Germany and East Germany took place 3 October 1990; all four powers formally relinquished rights 15 March 1991

National holiday:

Unity Day, 3 October (1990)

Constitution:

23 May 1949, known as Basic Law; became constitution of the united German people 3 October 1990

Legal system:

civil law system with indigenous concepts; judicial review of legislative acts in the Federal Constitutional Court; has not accepted compulsory ICJ jurisdiction

Suffrage:

18 years of age; universal

Executive branch:

chief of state: President Horst KOEHLER (since 1 July 2004)
head of government: Chancellor Gerhard SCHROEDER (since 27 October 1998); Vice Chancellor Joschka FISCHER (since 17 October 1998)
cabinet: Cabinet or Bundesminister (Federal Ministers) appointed by the president on the recommendation of the chancellor
elections: president elected for a five-year term by a Federal Convention including all members of the Federal Assembly and an equal number of delegates elected by the state parliaments; election last held 23 May 2004 (next to be held 23 May 2009); chancellor elected by an absolute majority of the Federal Assembly for a four-year term; election last held 22 September 2002 (next to be held September 2006)
election results: Horst KOEHLER elected president; received 604 votes of the Federal Convention against 589 for Gesine SCHWAN; Gerhard SCHROEDER elected chancellor; percent of Federal Assembly vote 50.7%

Legislative branch:

bicameral Parliament or Parlament consists of the Federal Assembly or Bundestag (603 seats; elected by popular vote under a system combining direct and proportional representation; a party must win 5% of the national vote or three direct mandates to gain representation; members serve four-year terms) and the Federal Council or Bundesrat (69 votes; state governments are directly represented by votes; each has 3 to 6 votes depending on population and are required to vote as a block)
elections: Federal Assembly - last held 22 September 2002 (next to be held September 2006); note - there are no elections for the Bundesrat; composition is determined by the composition of the state-level governments; the composition of the Bundesrat has the potential to change any time one of the 16 states holds an election
election results: Federal Assembly - percent of vote by party - SPD 38.5%, CDU/CSU 38.5%, Alliance '90/Greens 8.6%, FDP 7.4%, PDS 4%; seats by party - SPD 251, CDU/CSU 248, Alliance '90/Greens 55, FDP 47, unaffiliated 2; seating as of 1 July 2004: SPD 249, CDU/CSU 247, Alliance '90/Greens 55, FDP 47, unaffiliated 3, unfilled seats 2; Federal Council - current composition - NA

Judicial branch:

Federal Constitutional Court or Bundesverfassungsgericht (half the judges are elected by the Bundestag and half by the Bundesrat)

Germany's affluent and technologically powerful economy - the fifth largest in the world - has become one of the slowest growing economies in the euro zone. A quick turnaround is not in the offing in the foreseeable future. Growth in 2001-03 fell short of 1%, rising to 1.7% in 2004. The modernization and integration of the eastern German economy continues to be a costly long-term process, with annual transfers from west to east amounting to roughly $70 billion. Germany's aging population, combined with high unemployment, has pushed social security outlays to a level exceeding contributions from workers. Structural rigidities in the labor market - including strict regulations on laying off workers and the setting of wages on a national basis - have made unemployment a chronic problem. Corporate restructuring and growing capital markets are setting the foundations that could allow Germany to meet the long-term challenges of European economic integration and globalization, particularly if labor market rigidities are further addressed. In the short run, however, the fall in government revenues and the rise in expenditures have raised the deficit above the EU's 3% debt limit.

euro (EUR)
note: on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions within the member countries

general assessment: Germany has one of the world's most technologically advanced telecommunications systems; as a result of intensive capital expenditures since reunification, the formerly backward system of the eastern part of the country, dating back to World War II, has been modernized and integrated with that of the western part
domestic: Germany is served by an extensive system of automatic telephone exchanges connected by modern networks of fiber-optic cable, coaxial cable, microwave radio relay, and a domestic satellite system; cellular telephone service is widely available, expanding rapidly, and includes roaming service to many foreign countries
international: country code - 49; Germany's international service is excellent worldwide, consisting of extensive land and undersea cable facilities as well as earth stations in the Inmarsat, Intelsat, Eutelsat, and Intersputnik satellite systems (2001)

source of precursor chemicals for South American cocaine processors; transshipment point for and consumer of Southwest Asian heroin, Latin American cocaine, and European-produced synthetic drugs; major financial center